ALG, Inc., a subsidiary of TrueCar, Inc. and the industry benchmark for determining the future resale value of a vehicle, projects total new vehicle sales will reach 1,098,960 units in June 2020, down 24% from a year ago when adjusted for the same number of selling days. This month’s seasonally adjusted annualized rate (SAAR) for total light vehicle sales is an estimated 13 million units. Excluding fleet sales, ALG expects U.S. retail deliveries of new cars and light trucks to be 1,014,927 units, a decrease of 15% from a year ago when adjusted for the same number of selling days.
“Automotive retail continues to show positive momentum, rebounding from April lows and performing better than initially expected as states continue to ease restrictions,” said Eric Lyman, Chief Industry Analyst for ALG, a subsidiary of TrueCar. “Fleet is now also beginning to show signs of recovery, up twenty-two percent from last month, and we are also seeing significant improvement in the used market, where we expect used car sales to be up sixteen percent month over month.”
“While used vehicle sales were initially hit harder than new vehicles due to COVID-19 impact, we expect that trend to reverse itself now due to new car inventory shortfalls. Used vehicle inventory is always much larger than new and lease returns have been picking back up, adding a flood of two to three-year-old vehicles back into the used market. Additionally, there’s attractive financing and lower price points which are all helping spur increased demand in the used vehicle market,” added Lyman.
Additional Insights: (Forecast by ALG)
Total retail sales for June 2020 are expected to be down 15% from a year ago when adjusted for the same number of selling days and up 1.5% from May 2020 when adjusted for the same number of selling days.
Fleet sales for June 2020 are expected to be down 68% from a year ago when adjusted for the same number of selling days and up 22% from May 2020 when adjusted for the same number of selling days.
Total SAAR is expected to decrease 25% from a year ago from 17.2 million units to 13 million units.
Used vehicle sales for June 2020 are expected to reach 2,719,074, down 20% from a year ago and up 16% from May 2020.
The average interest rates on new vehicle loans is 5.99%
“Inventory availability will continue to affect new vehicle sales as a result of production pauses related to COVID-19,” said Nick Woolard Director of OEM and Affinity Partner Analytics at TrueCar. “With no inventory cushion, Tesla’s build-to-order model is expected to result in the brand getting hit the hardest month-over month with production stops completely shutting down order fulfillment. Toyota has also experienced outsized retail sales decline this month compared with other brands due to inventory availability, especially on their popular Toyota Tacoma. In the short-term consumers will likely have a harder time finding exact trims and colors for certain vehicles across the board due to these supply shortages.”
Quarterly Insights: (Forecast by ALG)
Total unit sales for Q2 are expected to be down 34% from last year when adjusted for the same number of selling days and down 19% from Q1 when adjusted for the same number of selling days.
Total retail sales for Q2 are expected to be down 26% from last year when adjusted for the same number of selling days and down 5% from Q1 when adjusted for the same number of selling days.
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SOURCE: TrueCar
